Ending the Embargo

Four blocks off of Miami Beach, on a sunny, palm-lined boulevard, there is a rather inconspicuous office building. Far from a skyscraper, this building shares its block with all the banalities of urban America: far too grandly named condominium developments, pilates gyms and the like. This building, however, far from being ordinary, is home to a unique financial concern called Thomas J. Herzfeld Advisors, Inc., a firm that, among other ventures, specializes in investments that bet on the end of the Cuban embargo and the regularisation of American-Cuban relations. The Wall Street Journal profiled Mr Herzfeld’s firm last year and revealed that one of their investments was a firm whose sole valuable asset was a 270 million dollar claim against the Cuban government for the nationalization of its power plants after Castro came to power. He is most likely to see a return on his investments after the death of Fidel Castro, which will be a turning point in Cuban-American relations, and an event before which the embargo will certainly not end.

It was precisely this nationalisation of American assets in Cuba that led to the first embargo; however, the final payment of claims against the Cubans for these confiscations represents just a small fraction of the economic opportunity that regularising the relationship between the United States and its island neighbour would bring. While these vast financial concerns are intimately wrapped up in the creation of the embargo and in the demand to bring it to a close, the embargo has been historically defended as an effort to bring about democracy in Cuba; indeed, many details of the laws behind the embargo specifically spell out the reforms needed before it can be ended.

However, this long-term use of soft power in pursuit of an altruistic mission of freedom and democracy is unique in American history. The Cuban situation stands out in the history of modern American foreign relations as an oddity. While the US has sanctions against adds only “four organizations and six individuals to an existing blacklist,” and calls for the mere resumption of the multilateral Six-Party Talks over the DPRK’s nuclear weapons program.[1] While support for the U.N. Resolution may be other states like Burma and North Korea, those states are (or were, in the case of Burma) also sanctioned by other members of the international community. The United States stands alone on the Cuban issue. Moreover, the US is not, broadly speaking, consistent when it comes to embargoes. It certainly does not blockade other nations which have a crueller history than Cuba’s, nor, most notably, has the US similarly embargoed Hugo Chavez’s Venezuela. In terms of nationalisations, the purported rationale for the Cuban embargo, Chavez comes close. Cuba stands out then, and it is clear that this policy exists for reasons beyond the stated aim of democratisation and punishment for the nationalisations. The reasons behind its existence and continuation must be understood in order to come to grips with the timing of its end.

Fidel Castro himself is a significant reason for the continued existence of the embargo. He personally symbolizes every actual and perceived wrong that his state has committed; most significantly his crimes against humanity and his role in the Missile Crisis. His longevity is closely linked to the endurance of the embargo. Given both the American public’s low perception of the man, and the political importance of the Cuban anti-Castro community centred in Miami, it is no surprise that the US has not wavered on the sanctions, despite serious international objection, during his lifetime. Indeed, the common description of the Miami Cuban community as ‘anti-Castro’ is telling. Thus only after Fidel’s death will the US take steps to end the embargo and regularize relations. Without Fidel, they will certainly be better placed to press the point, even if his heir apparent is his brother Raul. The Cuban-American community and the government are of course not naive enough to miss the connection between the two, however, so much of the antagonism is concerned with Fidel specifically, that he remains not only a major cause of the original embargo, but also the reason for its longevity.

There is also an element of prestige that is intimately linked with this policy. Fidel Castro survived numerous attempts to remove him and his involvement in the Missile Crisis demonised his name and turned the average American resolutely against him. To some he is a loose string from the Cold War, to others, a boogeyman from those dark days. That he still lives is an annoyance, and to allow the punitive sanctions to lapse while he lives would be an admission of the sort that the United States, and its influential Cubans, would rather Fidel not live to see.

The sanctions’ resilience to international opposition is not only connected to this element of prestige, but also to the geopolitical juxtaposition of Cuba and the US. Cuba falls clearly within the sphere over which the US has exercised hegemonic domination since the promulgation of the Monroe Doctrine. The US does not readily accept the claims of others on American affairs. Moreover, Cuba’s immediate physical proximity only adds to this effect. Given the short distance and the significant Cuban population resident in the United States, to some extent or another, the Cuban issue is rendered almost domestic, or at least so intimately two-party that others hesitate to seriously interfere. A similar American embargo of Sicily, for example, would be far less geopolitically sustainable.

In the final analysis, it is very likely that Mr Herzfeld will see a return on his investments. Regularisation will eventually inject billions into the American and Cuban economies. These benefits are to be desired, however, those most hurt by the embargo – average Cubans, also have the most to gain by the eventual liberalisation of their homeland. Many argue that the embargo has done more harm of late than the Castro regime. Indeed the end of the embargo may do more immediate good than regime change. But despite the challenges, it would be wrong if the US gave up on the principle of freedom and democracy, no matter how inconsistently it applies those values as a matter of foreign policy. The US should not allow, nor through inaction contribute to, the creation of a Latin-American mini-China 90 miles away from Miami, where there is a mostly free market but the people still kowtow to authoritarianism. One way or another, the embargo will not end while Fidel Castro lives. His death will be the turning point. The US should use the opportunity of Castro’s eventual death to encourage true reforms and then reward this behaviour by regularizing diplomatic and economic relations.